Base metals

Major Headline:

· Copper rose in MCX / LME, reversing an earlier drop, on signs that stockpiles of the metal may decline further, limiting supply. Zinc and lead also rose.

· MCX Copper rose almost by 3% on BHP billiton acquisition new and stock news from lme. MCX Copper traded at 288.50 per kg to register days high.

· MCX Zinc followed the red metal and traded as high as Rs. 95.40 pr kg, similarly Lead Feb touched high of Rs. 111.15 per kg.

· MCx Nickel remain bearish and was trading with loss at Rs. 1053 per kg

· Copper also rises as BHP Billiton, the world’s biggest mining company, raises the stake to acquire Australian Mining Company Rio Tinto

· Jiangxi Copper Co., China's second-largest producer of the metal, said output at its smelter dropped as much as 70 percent of normal production after weather hampered power supplies since Feb. 2. The company produced 554,000 tons last year, according to Beijing Antaike Information Development Co.

* Previously copper declined as global stock markets witnessed losses Tuesday, crude oil prices declined and the US dollar firmed against the euro. The prices were also hit by weaker than expected release of U.S. January ISM Non-Manufacturing Business Index.
* Moreover poor weather conditions along with weeklong Lunar New Year holidays beginning Wednesday in China are keeping off China’s demand. Thus Copper market may once again look at US economic factors, raising chances of slight ease in red metals prices in the near term.


MCX Copper Feb

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Copper Feb: Buy at 285 for the target of 291.30 and 295 with stop loss at 282.50

MCX Zinc Feb

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Zinc Feb: Buy at 94.40 for the target of 95.80 and 96.40 with stop loss at 93.75

MCX Nickel Feb

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

Recommendations:

MCX Nickel Feb: Sell at 1070-65 for the target of 1040 and 1020 with stop loss at 1095

MCX Lead Feb

Technical Outlook:

Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day moving average. The upside closing price reversal on the daily chart is somewhat positive.

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